The Great Atlantic & Pacific Tea Company
Investors, for their part, weren't much impressed. Indeed, on the day of the announcement, A&P's stock fell by more than 9% -- a trajectory that might cause investing cheapskates to wonder if perhaps A&P is a bargain just now.
I'd say no. The stock soared in 2005, after all, more than tripling on the year despite the supermarket chain's lack of positive free cash flow since 2002. Indeed, for the trailing 12 months that ended with the company's second quarter back in September, A&P was in the free cash flow hole by more than $227 million. In addition, A&P's same-store sales have been flat for 40 weeks into fiscal 2005. These weak financial fundamentals have earned the company a minuscule 2.7 P/E.
Then, of course, there's the intensely competitive nature of the grocery biz. With bigger boys such as Kroger
As with its regional supermarket rival, Pathmark
Further Foolish food for thought:
Whole Foods is a Motley Fool Stock Advisor recommendation.